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In September 2015, the United Nations General Assembly established a vision for 2030 by adopting the 17 Sustainable Development Goals (SDGs). The SDGs are a comprehensive set of objectives that aim to end poverty globally, ensure that the basic needs of all people are fulfilled, and protect the planet and the environment. However, at today’s level of investments a $2.5 trillion annual investment gap remains in key SDG-related sectors in developing countries. Upscaling private capital is crucial for achieving the SDGs and facilitating sustainable development. Over the last years, blended finance has proven to be a key instrument in bridging this gap and catalyzing in particular private investments towards the SDGs.

Blended finance enhances the concept of partnership between the public and private sector by maximizing synergies and leveraging the contributions of these two groups of investors, while setting clear impact targets to improve people’s lives, and the planet they live in.

The majority of publications on blended finance have largely focused on the rationale for public funders to adopt blended finance. There is, however, only limited research available on the primary objective of private investors, although understanding their motivations is pivotal to successfully design and improve blended finance vehicles in order to unlock private capital. We have therefore conducted a survey among BlueOrchard’s private investors, exploring their motivations and considerations when investing in blended finance funds.

We present the findings of this survey in our new study, aiming at giving voice to the private sector by conveying their views, objectives and expectations. Building on the results of the survey and leveraging our extensive experience in blended finance due to the numerous mandates we have managed since 2001, we have elaborated a new vision of blended finance, “Blended Finance 2.0”. In this version, the mobilization of private capital takes the center stage.